The longtime co-owner of Boises Stinker Stores and its two affiliated companies sold his share of the business to partner Charley Jones this week.
Shawn Davis, who just turned 60, always planned to sell his share. Jones always wanted to buy it and create a family-owned business. But the catalyst for doing the deal now was a tax increase on such deals that is set to take effect Jan. 1.
The basic federal tax on long-term capital gains is scheduled to rise when Bush-era tax cuts expire as part of the fiscal cliff. Unless Congress acts, the tax will rise to 20 percent from 15 percent, or more if other tax changes are considered.
That has encouraged some entrepreneurs and business owners to cash out this year to minimize tax liabilities on the profits they make from those sales.
Stinker Stores was founded in the 1930s. In 2002, Jones and Davis bought Stinker, its grocery and tobacco wholesaler Arrowrock Supply, and its fuel-trucking division, Westpoint Transportation. Davis had been working for the company for 16 years, supervising retail operations and then running Arrowrock.
When Shawn and I got together, we wanted to build the Stinker brand back to what it was before, Jones said.
Jones and Davis closed some underperforming stores and bought or built more than 30 new sites.
Selling his almost-equal partnership share to Jones has always been an end game, Davis said. He wanted a legacy company for him and his family, and I wanted to help create something that would last, that was good and would create some financial security for me and my family.
Davis said his goal had been to retire at 55. He didnt quite make it, but he feels very fortunate and blessed to be retiring at 60, he said.
Davis wasnt the only one considering the coming tax increases. Like other business owners in Idaho, Jones changed his estate plan when he bought Daviss share. Thats because, starting Jan. 1, certain taxes will start hitting estates of $1 million or more, compared with $5 million now. That, too, is part of the so-called fiscal cliff, and the change could be reversed or halted by Congress.
Those tax changes have local estate planners working feverishly to meet the end-of-the-year deadline for their clients.
As Shawn and I were doing this business transaction, I went to the attorney I use for estate planning, and their staff was running, Jones said.
Davis will continue to work with the company to help shift his job duties to others.
The company has 550 employees and 65 stores, all in Idaho.
Davis and Jones declined to disclose the companies revenues or the price or other terms of the sale.
Davis said he plans to try some new projects, but nothing business related. More like hobbies, education and travel with his wife, Jane, who works in special education. Hes looking forward to spending time with his family.
Any time I feel compelled to delve into business, I can always call up my (former) partner and give him advice, he said.
Audrey Dutton: 377-6448, Twitter: @IDS_Audrey